gold vault

On November 30th, voters in Switzerland will head to the polls to vote in a referendum on gold.
On the ballot is a measure to prohibit the Swiss National Bank (SNB) from further gold sales, to repatriate Swiss-owned gold to Switzerland, and to mandate that gold make up at least 20 percent of the SNB’s assets.
Arising from popular sentiment similar to movements in the United States, Germany, and the Netherlands, this referendum is an attempt to bring more oversight and accountability to the SNB, Switzerland’s central bank.
Will the Swiss throw a wrench into Western Central Banks’ plans by voting to get their gold back??

Excellence

There was quite an interesting headline in the news, which, to my great surprise, went almost completely under the radar, at the close of 2013.  It was only picked up by a few small media outlets, and then was quickly dropped.
Nothing further was said, and no additional commentary was even given.  I hope to remedy that today.
The headline was this: Russian banks buy up 181.4 tons of gold, in 2013.
Read that againcarefully.
Does it say, “Central Bank of Russia buys 181.4 tons of gold”?
No, it says that commercial Russian banks bought almost 90% of Russia’s gold production in 2013.

nudity

On November 30, the good people of Switzerland will finally get an opportunity to make their voices heard.  The Swiss Gold Initiative can be roughly stated in three parts:

  1. The halting of all Swiss gold sales
  2. The repatriation of all Swiss gold that is held in foreign vaults
  3. Resume backing the Swiss Franc with gold, at a minimum level of 20%

I hate to be the bearer of bad news, Switzerland, but what you suspected all along is actually true.  Your gold is gone.
All of it.  Leased and sold away by your central bankers and politicians.

In 1950 the US owned about 20,000 metric tons of gold – approximately 640,000,000 troy ounces.
By August 15, 1971 when President Nixon “temporarily” closed the “gold window” that hoard had decreased to about 8,100 tons (Fort Knox, the NY Fed, and other locations).
The US government had been overspending, exporting dollars oversees, and other governments had “cashed in” those dollars for gold.
Forty three years later (since August 15, 1971) the “temporary” policy is still in place, the US government has officially redeemed no dollars for gold, and the US economy has deteriorated.

Bernanke-Dimon-Fed-TunnelOne of the keys we watch here along with the US dollar is the price and movement of gold.
If you do any research on gold at all, you will quickly discover that there is a commonly held view that Central Banks hate gold and think of it as a useless asset that does not earn interest.
As usual, if you dig a little deeper and do more research you discover a different story. 

WillieA processing plant is being formed, to rid the Saudis of USTreasury Bonds, and to rebuild their Gold reserves.
The Saudis  have announced a new sovereign wealth fund to be established, independent of their central bank, devoted to prudent investment.
Read Gold investment.
The indication is clear movement away from the USDollar and USTreasury Bond complex. The US-Saudi divorce is speeding away from the lawyer’s offices, and asset redistribution is the key word.
Abandonment of the Petro-Dollar involves the reversal of a generation in commitments.  It involves discharge of decades of accumulated rubbish US$-based debt paper.
We could have the first sighting of a BRICS Central bank outpost for processing USGovt debt securities, straight into Gold bullion. 

Play

willie In the first of two EXPLOSIVE interviews with SD,  Hat Trick Letter editor Jim Willie gave some of his BOLDEST & MOST SHOCKING PREDICTIONS EVER for SD listeners:

  • Willie dissects the Holy Grail Gazprom gas deal, which he states is an OPEN DOOR for the dumping of Treasury bonds in exchange for energy
  • Russia Liquidating T-bonds through Euroclear in Belgium to acquire gold
  • Big Surprise Coming for London Boys: Frankfurt to Become Financial Hub For All of Europe & Asia- Willie reveals insider details
  • Large sovereigns (Russia, China, India, Saudi Arabia) now working together to source massive gold reserves for gold-backed USD replacement
  • China & Russia Have Accumulated Over 40,000 Tons of Gold Reserves for USD Replacement!!

Jim Willie’s Full MUST LISTEN interview with The Doc is below:

Bernanke-Dimon-Fed-TunnelItaly’s central bank, the Banca d’Italia, has recently published an important document detailing the storage locations and composition of the country’s gold reserves. The document confirms that Italy’s gold is held across four vault locations, three of which are outside Italy.
This is a significant announcement given that the Banca d’Italia is the world’s third largest official holder of gold after the U.S. and Germany. Italy officially holds 2,451.8 tonnes of gold, worth more than €72 billion (US$ 100 billion) at current market prices [1].
In the detailed three page report focusing exclusively on its gold reserves (and only published in Italian), the Banca d’Italia reveals that 1,199.4 tonnes, or nearly half the total, is held in the Bank’s own vaults under its Palazzo Koch headquarters on Via Nazionale in Rome, while most of the other half is stored in the Federal Reserve Bank gold vault in New York.

Thanks to a tip from an SD reader, we have discovered the US’ official bar list of “Deep Storage Gold”  held at Fort Knox, Denver, and West Point, buried in a PDF file on the House Financial Services website.
Updated on Sept 30th, 2010, the document provides a full bar inventory including total bars, weights, and fineness of the US Deep Storage Gold reserves.  

For all those inquiring minds wondering how much if any of the US’ gold reserve remains, the official US Deep Storage Gold bar list is below:

The Bank of Italy is the fourth largest owner of gold reserves in the world, which is out of all proportion to the size of the country. But I never thought it wise to sell it, because for central banks this is a reserve of safety.

In what is no doubt a propaganda piece designed to attempt to slow the gold repatriation and audit request freight train, the Bank of England has taken the unprecedented step to allow University of Nottingham chemistry Professor Martyn Poliakoff to take a video tour of the BOE’s gold vault.
Poliakoff excitedly proclaims that he has never seen this much tungsten gold (or this much of ANY element he clarifies), and states that his gut tells him that one’s first reaction is that it can’t possibly be real.
Poliakoff lets out a little too much truth in his interview (perhaps the BOE should have commissioned someone from the BBC to conduct the interview rather than a Chemistry professor?), stating that the reason the BOE and the central banks keep so much of their reserves in gold is because the value of gold is very stable compared to the value of currencies.
He also explains how the futures market really works:  Each bar has a serial number, and when people buy and trade the gold, they don’t actually take the bar home, the number is just transferred from the seller’s account to the buyer’s account. (What Poliakoff doesn’t mention is whether each bar has been rehypothecated to numerous owners as Ned Naylor-Leyland discovered was the case with Bob Pisani’s GLD bar last spring)

Poliakoff’s MUST SEE full video tour of the Bank of England’s gold vault is below:

Brazil’s aggressive efforts to weaken its currency by buying dollars – about $132 billion since the beginning of 2008 – have left the country with the sixth biggest international reserves in the world, about 80% of which is denominated in the US currency. However, recent turmoil in currency markets and concerns over the global financial crisis and fiat currencies in general has given Brazil’s authorities even more reason to diversify their holdings.  It has frequently stated its intention to diversify assets and reduce its exposure to currency risk. Recent sharp weakness in Brazil’s real (see table) and systemic risks are leading central banks, including the BCB to diversify into gold. Brazil raised its gold holdings by 17.2 tonnes in October to 52.5 tonnes, the highest level since January 2001. The move comes on the back of Brazil’s 1.7 tonne increase in September, the country’s first significant gold purchase in a decade. However, there are concerns that the increase in the Brazilian central bank gold holdings’ and tonnage are not all that they seem.  It appears that the central bank in Brazil has not actually bought London Good Delivery bullion bars but rather fixed term gold deposits with bullion banks. Recently, the Brazilian central bank was asked about their gold reserves and about a section on gold on their website under ‘Official Reserve Assets’ lists gold as “gold (including gold deposit and, if appropriate, gold swapped)” with a footnote of “Includes available stock of financial gold plus time deposits.”

The Deutshe Bundesbank has responded to inquiries regarding holding the majority of Germany’s gold reserves in Paris, London, and New York.
The Bundesbank is apparently attempting to calm the panic over Germany’s gold instigated by the Federal Accountability Office, stating,

”We do not have the slightest doubt that our holdings in New York and Paris are also made up of the purest fine gold. We have at our disposal fully documented lists of the bars, and our partner central banks send us every year confirmation not only of the bars’ existence but also of their quality.’We had nothing but the best of experiences with our partners in New York, London and Paris...
There was never any doubt about the security of Germany’s gold. In future, we wish to continue to keep gold at international gold trading centres so that, when push comes to shove, we can have it available as a reserve asset as soon as possible.
For years, our gold has been stored by the highly esteemed central banks of the United States, Great Britain and France without provoking any complaints whatsoever – not by just any fly-by-night operators. Part of the debate in Germany has veered somewhat towards the absurd.”

On Monday, we reported that the German Financial Accountability Office had mandated the Bundesbank repatriate 150 tons of German gold from the NY Fed over the next 3 years.   While this was to be expected and even inevitable in the wake of Venezuela’s gold repatriation in 2011 as well as global rehypothecation concerns, a previously classified report leaked today has revealed a much larger German gold repatriation has already occurred- from 2000-01!!

The previously classified report reveals that the Bundesbank withdrew nearly 1,000 tons of physical gold from the Bank of England in 2000-2001, decreasing Germany’s gold holdings in London from 1,440 tons to 500 tons.

Let that sink in for a moment.  Germany withdrew 1,000 tons of physical gold from the Bank of England at the EXACT TIME that gold bottomed and began its decade long bull run.   Did Germany pull the carpet out from under the cartel gold leasing party and ignite gold’s secular bull market in 2000?

After months of dragging their feat and claiming it was necessary for national security reasons to keep the info classified (sounds like an freedom of information request to the Fed) The Bank of Mexico has been forced to comply with the Federal Transparency Law and release information revealing where the Central Bank’s gold reserves are held.

In what will not be a surprise to any SD reader, the report reveals that The Bank of Mexico holds less than 5% of it’s gold reserves within Mexico, while the remaining 95% of it’s ‘physical’ gold reserves are held in the US and London (translation- nearly the entirety of Mexico’s gold reserves are held at the Bank of England and the NY Fed basement, and have likely been rehypothecated more times than an MFG client’s assets).

Our friend Eric Sprott recently pointed out in his monthly newsletter Do Western Central Banks Have Any Gold Left? the likelihood that the Western Central banks have largely leased out the gold they are supposedly holding as reserves.
In effect, Mexico just admitted that their actual, tangible gold reserves are 1/20th of the stated total.  Perhaps Mexico should consider hiring Hugo Chavez as their gold reserves consultant.

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